COSATU is appalled by Rand Merchant Bank’s disingenuous and reckless attack on local procurement
21 April 2022
The Congress of South African Trade Unions (COSATU) is appalled by the misguided attack on local procurement by Rand Merchant Bank (RMB). The CEO of RMB in a moment of thoughtless recklessness launched an unwarranted attack on the need to support local procurement in the renewable energy sector. He argued that it is more efficient to import than to purchase locally produced materials.
This is an unhelpful and economically irrational call that seeks to bully government to back away from championing local procurement, thus placing hundreds of thousands of badly needed local manufacturing jobs at risk.
South Africa is in a deep recession and unemployment is at an all-time high of 46% and rising. Key to reversing this and growing the economy is to ramp up local procurement at all fronts.
This includes the cars and furniture government buys, construction material for infrastructure, food that hotels purchase, and the clothes consumers wear. Buy local is the fastest, cheapest, and most sustainable way to grow the economy. It is a central pillar of the Economic Recovery and Reconstruction Plan. This is what China and countless other countries have done.
The reason why imports from Asia are cheap is because they are subsidised by their government. South Africa cannot afford to do that, but what it can and must do is to protect local industries, to help them grow and to call upon consumers to support them.
South Africa is fortunate to have a highly diversified and industrialised economy. The key sectors are fragile and have great potential not only for domestic consumption but for the region and continent.
To enable these industries to grow, they require support and investments from government and the banks. Such support ranges from reliable and affordable energy, paved roads, clean water, low crime, skilled workers, export incentives and investments in technology.
Growing the economy cannot be left to short cuts like allowing the dumping of renewable energy technology. Billions are being spent expanding our energy infrastructure.
This money needs to be spent supporting the local cement, steel, and metals industry. We need government to support the growth of companies in Cape Town, Gqeberha and Ethekwini who manufacture solar panels. We cannot afford to spend South African taxpayers’ monies on subsidised imports that will decimate local industries and destroy South African jobs.
This perverse economic logic from RMB’s CEO will lead to the collapse and decimation of not only local energy supply manufacturers. If this senseless idea is adopted, there will soon be calls to allow the same to be done to other industries with great potential to grow the economy. China, the European Union, the United States, and many other countries do not experiment with such suicidal economic theories, neither should we.
COSATU envisages the creation of a renewable energy sector with manufacturing components sourced locally in order to boost the local economy and create significant jobs for young people and women. The renewable energy sector will only result in gains for the South African economy if components are manufactured in South Africa.
Issued by Sizwe Pamla, National Spokesperson, COSATU, 21 April 2022
